Thursday, February 28, 2008

The battle for smartphone supremacy is about intensify after Apple Inc. (AAPL/ NASDAQ) said yesterday that developers will learn the details needed to create third-party software for its iPhone.

Apple's move is viewed by analysts as a way to bolster sales of the massively popular smartphone, which have been declining lately. But its mention yesterday of additional enterprise features may have serious implications for Research In Motion Ltd.'s (RIM/TSX) BlackBerry devices.

Although Apple does not provide details on upcoming releases, speculation online suggests a BlackBerry-like push-e-mail service will be forthcoming from the Cupertino, Calif., company. Currently, iPhone users must manually pull the messages down from their accounts.

"Apple has acknowledged that there has been great interest in the enterprise community for the iPhone," said Tim Bajarin, principal analyst of Creative Strategies. "There's no question it has great potential in enterprise given the right application."

In a research note released yesterday, UBS equity analysts Jeffrey Fan and Maynard Um downplayed suggestions an iPhone with enterprise functionality will affect RIM.

"We maintain our view that RIM's lead in the high-end enterprise market will remain unchanged given its platform and architecture, technology lead, single point of contact support structure, vast distribution channel, established scale/presence, out-of-box experience, and lower total cost of ownership," the note said.

Messrs. Fan and Um both wrote that a possible opportunity lies in the small and medium-sized business markets. They could benefit from Apple's potential support for Microsoft Exchange e-mail servers. If that market does react well to the iPhone, then smartphone offerings from Palm Inc. (PALM/NASDAQ) and Motorola Inc. (MOT/NYSE) will likely be affected.

Since its release last May, the iPhone has sold more than four million units and gained a 7% market share in the global smartphone industry, according to figures provided by U.K.-based analyst firm Canalys. RIM shipped 12.2 million BlackBerry's last year to retain a 11% global market share.

Nokia Oyj (NOK/NYSE) is the current global market leader, shipping 60.5 million smart-phones and holds a commanding 65% market share.

Although fears that any economic headwinds could affect RIM's business with the financial sector, one of its largest customer bases, RIM said last week it was raising its forecast for fourth-quarter subscriber additions by up to 20%.